Congressional investigators are confronting the Justice Department about evidence they say indicates an FBI informant used U.S. taxpayer money not only to buy drugs but also possibly to buy guns for the Sinaloa cartel.

Those facts apparently were known by the FBI and DEA as early as 2009 but not passed on to key people in the Bureau of Alcohol, Tobacco, Firearms and Explosives, which went on to spent millions of dollars and thousands of man hours trying to identify that informant and others gun traffickers like him through the controversial Operation Fast and Furious.

The informant first received at least $3,500 in official law enforcement funds as payment for illegal narcotics, according to a letter Tuesday to Attorney General Eric Holder from Rep. Darrell Issa and Sen. Charles Grassley. Issa and Grassley, who don’t elaborate on the nature of that payment, say the informant then became the "financier" for a firearms trafficking ring while cooperating with the FBI and receiving "additional payments as a confidential informant."

The informant, identified only as "CI#1," was allegedly buying guns in January 2010 from Manuel Celis-Acosta, the Phoenix man considered the main target of Operation Fast and Furious, which began about the same time. It was intended to follow guns purchased by so-called "straw buyers" in the United States to the traffickers who were selling them to the cartels in Mexico.

Fast and Furious came under intense scrutiny after it was revealed that U.S. authorities let illicit sales proceed but then lost track of hundreds of the guns, some of which ended up at the scenes of violent crimes, including the killing of a U.S. border agent.

Issa and Grassley, both Republicans, asked Holder to tell Congress how much the Department of Justice paid the informant, when he became an informant and how much the informant spent buying guns for the cartels.

"If ATF had known in January 2010, as the DEA and the FBI apparently knew, that the straw purchasing ring was procuring weapons for CI #1, then Operation Fast and Furious may have ended 10 months sooner than it did," the lawmakers wrote in their letter. "This would have prevented hundreds of assault type weapons from being illegally straw purchased on behalf of Mexican drug cartels."

The lawmakers, citing confidential sources, said the informant regularly traded information for money with Jim Roberts, the DEA's agent-in-charge in Juarez, Mexico. The letter also for the first time names higher-ups within the Justice Department who knew Celis-Acosta was moving "heavy-duty firearms" to the Mexican cartels.

"Sources have indicated that this information was communicated to numerous senior people in the (DOJ) Criminal Division, including Assistant Attorney General Lanny Breuer and several of his top deputies, including Jason Weinstein, Kenneth Blanco and John Keeney," the letter says.

As for the frequent criticism that the ATF unnecessarily prolonged Operation Fast and Furious, the letter says the agency knew by July 2010 that Celis-Acosta had crossed the U.S.-Mexican border 15 times, but chose not to arrest him, even though those crossings -- and the hundreds of guns ATF agents witnessed him receiving -- constituted probable cause.

Grassley and Issa have requested Holder turn over the requested documents by Oct. 4. So far, the Justice Department has provided just 12 documents over the last month, according to a Grassley spokesman.